BANK OF PNG ANNOUNCES BUDGET DEFICIT OF OVER K275.5 MILLION

The Bank of Papua New Guinea has recorded a budget deficit of over K275.5 million in its September Monetary Statement.
This came about as a result of the government’s expenditure on the construction phase of the PNG LNG Project in the last two years.

This was revealed by the Governor of the Bank of Papua New Guinea, Loi Bakani in his address to members of the Port Moresby Chamber of Commerce.

But Bakani said, with the export shipments of the LNG Gas, the PNG economy will be expecting a surplus next year.

In 2013 the budget, the government has seen a 20% increase in its spending. Much of this money was invested in the health, education and law and order sectors.

This increase is also evident in the annual release of K10 million by the national government as District Support Improvement Program funds for each electorate.

But with so much money being injected into the economy, the country is currently experiencing an 8% increase in inflation.

This means shops owners and business houses will most likely increase the price of goods and services to get back the money lost through inflation.

Meanwhile the PNG kina is depreciating against both the US and Australian Dollars, leading to higher import prices.